I had the same reaction my first year with my last employer. I'd done a little job hopping here and there and mostly worked for small to medium sized companies. My usual annual raise was 15%ish. My job hopping increases were 25-30%. When a company had held back my earnings for a couple of years and wouldnt re-index me back into the market, I went straight to work for their primary competitor and handed them their ass. Not a smart move.
My first year at the last employer netted me a 2% raise. I looked at the boss and said "Uh...is this missing a one on the front or a zero on the back" and he smirked and said "No, thats our standard annual raise". I pointed out that the effort to do all the paperwork and processes around the reviews probably cost more than 2% of our aggregate income :
The good news though is when my 2nd line manager asked me the next day about my review I told him I was very disappointed in the increase. He said that was about the best they could do on salary, so I asked "well, next year if it comes down to that, I'd appreciate a bigger bonus or a lot more stock. In fact, more stock would be great as I know I'm contributing directly to the companies bottom line and I'd like to see more of my compensation tied directly to that success".
The next year, I got 3%, but a nice big bump in my bonus, and...two years worth of huge stock option grants. My eyes popped out. Five years later when those grants matured and were exercisable, they were about a buck a share cost to me (after a bunch of splits) and worth about $1.7M.
And I learned a nice trick. Turns out each "review group" has fairly fixed salary guidelines, but they each got a lump of bonus money and stock to distribute, and there was always some slack left in the bonus and stock pools. The guy managing the review group had discretion to push some of that slack to a specific individual...if you could make a case. So five minutes yapping with him or her at the end of the review session and talking up my #1 performer in that group usually got me a little stock/bonus spiff for them. Most of the managers didnt want to bother with the extra work.
So when the crappy raise fairy drops by, look for other ways that are easier for your boss to help you out with compensation. Their hands may be tied on salary, but more vacation time, some flexi-hours, some more stock or bonus money, a promo, better projects...they've got something they can use to please a good employee.
If your company gives NO leeway of any kind to the management or they wont give YOU any leeway, they either arent a very good place to work or they dont value your contributions. These are good things to know